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TMI Blog2025 (4) TMI 1259X X X X Extracts X X X X X X X X Extracts X X X X ..... red to as the "Act"), dated 23.05.2023, for Assessment Year 2013-14. 2. Grounds taken by the Revenue are reproduced as under: 1. On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in deleting the addition made of Rs. 1,27,35,801/- on account of unexplained cash credit u/s 68 of the IT. Act, 1961 by the AO in respect of bogus loss claimed by the assessee by way of transacting in penny stocks namely M/s VAS Infrastructures Ltd and M/s Neha International Ltd. On the facts and circumstances of the case and in law, the La.CIT(A) erred in deleting the addition made of Rs. 1,27,358/- on account of unexplained expenditure u/s 69C of the IT. Act, 1961 by the AO in respect of cash commission paid to get accommodation entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Rs. 57/-. Likewise, assessee bought 2,00,000 shares of the company VAS Infrastructure Ltd. during June, 2011 for average price of about Rs. 106/- and sold 1,44,000 shares during the relevant AY for Rs. 48,66,688/-. Because of these transactions, assessee incurred short term capital loss of Rs. 1,27,35,801/-. This short-term capital loss was set off with other short term capital gains derived from sale of other scrips. Ld. AO analyzed the financials of both the companies and relied upon statements recorded by the promoter of the VAS Infrastructure, Shri Jayesh V. Valia and other intermediaries and finally came to the conclusion that this is only a sham transaction and it is nothing but artificial capital loss arranged to set off with genui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal and VAS Infrastructure in which assessee incurred short term capital loss, viz. Rs. 23,58,781/- for Neha International and Rs. 1,05,24,693/- for Vas Infrastructure, totaling to Rs. 1,28,72,474/-. The same are also extracted below for ready reference: 5. Ld. CIT(A) objectively considered the submissions made by the assessee, duly corroborated by documentary evidence and came to factual conclusion to delete the additions so made by the ld. AO. His observations and findings in this respect are extracted below: "In this ground, the assessee contested the addition made on account of short term capital loss as unexplained cash credits. I have gone through the assessee's submissions and considered the facts and circumstances of the case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. I have gone through the promoters' statements available at pg. no. 22 of assessment order but the promoter never confessed any such thing about that. He simply replied that "I can offer no explanation to such behaviour in the stock price. My exposure to the scrip was very limited and I am hereby, submitting the details." The AO further states that he has relied on statement of some intermediaries. But, none of the intermediaries who purported to be involved in accommodation entries have given any categorical statement with regard to manipulation of the stock prices. Even verification of financials reveals that during AY 2011-12, profit of the company was at Rs. 1.63 crores, whereas in AY 2012-13, it has ended up with loss of Rs. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in this case, accordingly the addition is hereby deleted." 6. We have heard both the parties and perused the material placed on record along with paper book filed by the assessee containing 96 pages. We note that transactions were undertaken through the SEBI registered broker on the stock exchange platform on which STT was levied and the consideration was routed through normal banking channel. The entire flow of these transactions is corroborated by relevant documentary evidences placed on record. While making the addition, there are no discrepancies pointed out by the Assessing Officer in the documents and the details furnished by the assessee. Ld. AO has not bothered to discuss or point out any defect or deficiency in the documents fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The finding arrived at by the ld. Assessing Officer is thus purely an assumption based on conjectures and surmises. In our thoughtful considerations to the facts and circumstances of the case, it is not in controversy that assessee has discharged his burden by submitting the relevant documents, details of which are already noted above, forming part of the paper book. 6.2. Reliance placed by the ld. Assessing Officer on the report of investigation wing without further corroboration based on cogent material does not justify the conclusion that the impugned transaction is bogus, sham and part of racket of accommodation entries. It does not prove that the assessee has carried out the impugned transactions of purchase and sale of shares in con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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